NEGOTIATIONS 101: BASICS AND PRACTICAL APPLICATIONS Marick F. Masters Wayne State University 255 Reuther Library 313-577-5358 marickm@wayne.edu 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 OUR PURPOSE Why negotiations capability matters Highlight the essential features of effective negotiators and effective negotiating Do a couple of exercises Review highlights 11/10/2018 Negotiations 101 September 5 2018

WHY NEGOTIATING CAPABILITY MATTERS It gives you some control over important outcomes in life It helps you to build stronger relationships It facilitates important transactions 11/10/2018 Negotiations 101 September 5 2018

TODAY’S LEARNING OBJECTIVES Survey the fundamentals of the negotiating process Take your negotiating profile Highlight critical skills Build awareness of negotiating opportunities 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 AGENDA The ubiquity of negotiations/A working definition Know thyself Negotiation and leadership Critical skills The negotiating process How to prepare Alternative approaches to negotiating Closing Breaking deadlocks 11/10/2018 Negotiations 101 September 5 2018

THE UBIQUITY OF NEGOTIATIONS Think of the variety of daily situations in which you negotiate or could negotiate if attuned to the opportunity What is NON-negotiable? Negotiations situations vary: Range of parties (friends/family; business partners; suppliers; customers) Formality (conversational; transactional; summitry) Salience (minimal stakes—high stakes) Complexity (simple—intricate) 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 A WORKING DEFINITION Etymology: Not leisure Salacuse: a process of communication by which two or more people seek to advance their individual interests by agreeing on a desired course of action Masters: a decision-making process in which two or more parties seek to resolve disagreements, make deals, or change behaviors 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 KNOW THYSELF Build your profile Know how you are perceived Negotiate in THEIR world The pyramid of an effective negotiator 11/10/2018 Negotiations 101 September 5 2018

THE PYRAMID OF AN EFFECTIVE NEGOTIATOR BEHAVIORS SKILLS COMPETENCIES 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 NEGOTIATION AND LEADERSHIP: COMMON DIMENSIONS J. Salacuse. 2017. Real Leaders Negotiate! NEGOTIATION LEADERSHIP Communications Communication Interests Action Process Power 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 CRITICAL SKILLS Communications Listening Questioning 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 COMMUNICATIONS Verbal: the words you use Para-verbal: inflection, pace Body language: facial, gestures, posture, dress, handshake, distance, eye contact 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 LISTENING Passive: hear words Active: hear words, emotions, relationship; convey understanding; observe body language and para-verbal; communicate interest Clear mind of “noise” Focus Follow the 70/30 rule: listen 70% of the time 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 QUESTIONING Ask interrogative questions: how, what, why Ask and listen Recap and listen Use “I” not “You” word: I don’t understand rather than you don’t understand 11/10/2018 Negotiations 101 September 5 2018

THE NEGOTIATING PROCESS PHASES DIMENSIONS ELEMENTS Prospect Process Interests Prepare Substance Options Propose Context Alternatives Bargain Timing Relationship Close Commitment Implement Communications Re-negotiate Standards 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 POWER IN NEGOTIATIONS Widely misperceived Under- and over-estimated Ability to walk away Availability of alternatives Subtle and overt BEST ALTERNATIVE TO A NEGOTITATED AGREEMENT (BATNA) What do you do if this negotiation fails? Failure to agree is NOT the same a failure to negotiate 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 HOW TO PREPARE Planning NOT plan Prospect: build alternatives Determine interests and positions Set prices: asking, target, reservation (walkaway) Know the other side (TOS) Prepare proposals Think radially Rehearse and reverse 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 PREPAREDNESS Intellectual: know the subject matter, TOS, context Psychological: anticipate the unexpected; focused Emotional: balanced (if you get angry…you get….) Physical: rested 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 NEGOTIATING STYLES Dual concerns model: outcome and relationship balance Accommodating Avoiding Competing Collaborating Compromising 11/10/2018 Negotiations 101 September 5 2018

COMPETITIVE VERSUS COLLABORATIVE NEGOTIATING: AN EXERCISE What do you think of when you think of a competitive negotiation? What do you think of when you think of a collaborative negotiation? How do you transform a competitive negotiation into a collaborative one? 11/10/2018 Negotiations 101 September 5 2018

TWO APPROACHES: COLLABORATE v. COMPETE Focus in interests Focus on positions Seek mutual gains Seek advantage at expense of TOS Explore options Hard tactics Open communications Play things close to the vest Reciprocate Dominate 11/10/2018 Negotiations 101 September 5 2018

INTEREST-BASED BARGAINING (IBB) Focus on problem NOT people Focus on interests NOT positions Explore options Apply legitimate standards to assess options Develop alternatives 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 CLOSING Start with a close in mind Paint a picture of what a deal might look like Take confidence building steps Build momentum Recap Leap ahead if the time is ripe Listen: give “considered” responses 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 BREAKING DEADLOCKS Take a break Walk away (temporarily) Change venues Change people Third-party intervention 11/10/2018 Negotiations 101 September 5 2018

NEGOTIATING EMPLOYMENT CONTRACTS: AN EXERCISE Divide into two groups: a job candidate and a department chair of a university Situation: job candidate and department chair are negotiating the details of an employment contract for fall 2018 Your task: What issues will you bring up (top three)? What is really critical to the deal? What interests are you trying to serve? 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 NEGOTIATING A “JOB” Determine what’s important Know TOS’s latitude Be flexible and reasonable Ask for what you can justify Justify through external standards In Business as In Life, You Don’t Get What You Deserve, You Get What You Negotiate Negotiate in their world: what can You do for Them “We” is a powerful word 11/10/2018 Negotiations 101 September 5 2018

Negotiations 101 September 5 2018 TAKEAWAYS Know Thyself Listen Be Prepared Paint a Picture Prospect Alternatives Ask Confidently Negotiate in Their World Be Professional At All Times and In All Venues (Digital and Telephonic) 11/10/2018 Negotiations 101 September 5 2018